Which of the following statements is correct about privatisation?
Statements:
I. It promotes economic efficiency
II. It delimits the interference of bureaucracy
III. It leads to market failure

Correct option is A

Privatisation refers to the transfer of ownership of a business, industry, or service from the public sector to the private sector. The key objectives behind privatisation are to improve efficiency, reduce government interference, and stimulate competition.

1. Statement I (Promotes economic efficiency): This is true because private firms, driven by profit motives, are generally more efficient than government-run enterprises. They are incentivized to minimize costs and maximize productivity.
2. Statement II (Delimits the interference of bureaucracy): This is also true. By shifting ownership from the government to private hands, the direct involvement of bureaucrats and government officials in the management of industries is reduced, thus decreasing bureaucratic inefficiency.
3. Statement III (Leads to market failure): This statement is incorrect. Privatisation typically aims to reduce the risk of market failure by fostering competition and innovation. While market failures can occur in any economy, privatisation is often intended to improve market functioning rather than lead to failure

Additional Information:

• Economic Efficiency: Private firms are generally better at managing resources efficiently because of competitive pressures and a profit-driven approach.
• Bureaucratic Interference: The shift of control to the private sector reduces the government's role in day-to-day operations, thereby limiting bureaucratic control.
• Market Failure: While market failure can occur in any system, privatisation is seen as a means to enhance competition and reduce inefficiencies, not as a cause of failure.